Onward & Upward: The Future of Anime in American Markets

Forum stalwart and poster extraordinaire Joshua "Fievel" Kaplowitz brings us his report from Anime Expo 2007's industry panel on the future of anime.

The next few years are going to be pivotal ones for the anime industry. The entertainment industry in general is moving away from physical media such as DVDs and CDs and towards digital forms of distribution, something anime fans have been on the cutting edge of since the earliest days of affordable broadband and peer-to-peer file sharing.

Read on to find out what industry figures such as Tony Oliver of Bang Zoom! and Anime TV, Peter Heumiller of Comcast Select OnDemand, Justin Sevakis of ImaginAsian TV, Leo Chu of MTV and SpikeTV, and Eric Calderon of Gonzo Entertainment think about emerging issues as digital downloads, the future of anime on cable television, joint American-Japanese productions, and everybody's favorite topic - piracy.

Onward & Upward: The Future of Anime in American Markets

By Joshua Kaplowitz

The California sun showers its oppressive rays upon Long Beach as thousands upon thousands flock to the Convention Center. Anime Expo has returned. Young and old alike come together in a congregation of epic proportions, all centered on the tiny niche market of Japanese animation and culture.

Several years ago, the market for Japanese animation was small. With the exception of Dragonball Z, Speed Racer and a scant few other mass appeal series, there was little-to-no Japanese presence in mainstream American culture, outside of Godzilla and Speed Racer, and those only as punch lines and anecdotes.

Now, in the year 2007, there are at least three competing channels specializing purely in Japanese animation and culture. Anime films premiere in American theaters with subtle, carefully aimed marketing blitzes. Young children attend schools wearing Naruto headbands and adults carefully dust their viewing cases of Gundam models.

In a market that expands, not just rapidly, but exponentially, how can companies hope to keep up? Anime Expo again poses this question to several core members of Japanese-centric American media. Featuring key members from ADV, Spike TV, Gonzo, Comcast, Bang Zoom! Entertainment, and ImaginAsian TV, a special panel centered on the question of the future of anime in movies, TV and cable was held.

The panel began with the general question of predicting the future. The consensus of the panel seemed to be that DVD and video was no longer the main focus of distribution.

“The key is looking at trends and going to the fans to find the niche,” says Tony Oliver of Bang Zoom! Entertainment. “As such, we’ve created AnimeTV. We can no longer focus entirely on DVDs for income, but we have to look to the culture as a whole.”

Elaborating upon this, Peter Heumiller of Comcast Select OnDemand added, “TV channels and websites are becoming the key to the market. Cross-platforming and the creation of original programming and ideas geared toward the fans and piquing interest in content that would otherwise go overlooked.”

“It’s hard to just buy anything we want anymore,” said ImaginAsian TV’s Justin Sevakis. “We need to become much more niche-oriented and gear certain blocks of programming toward a specific focus. Also, showing shows in original Japanese with subtitles, as well as live action shows appeals a lot more toward the core niche of our fanbase.”

With the advent of bringing Japanese animation to television, comes the question of linear programming versus a more variable OnDemand format. Linear programming is the current form of television most used by networks where executives and higher-ups determine what shows to put on at what time in order to bring in the largest audience. OnDemand, however, allows the viewer to pick and choose what they watch at their leisure.

“OnDemand won’t necessarily take over the television market,” said Mr. Oliver. “Linear programming will still be required to expand to all available markets. The biggest shortcoming of OnDemand is that it doesn’t necessarily allow for pushing new programming on the market. Most consumers will pass by an unknown show, rather than watch it out of curiosity.”

Mr. Heumiller pointed out that even with its flexibility, OnDemand wouldn’t overrun linear programming because of the accessibility of hardware like Tivo and DV-R.

With the advent of televised anime, would DVDs then become marginalized to the point of being forced from the market? Mr. Sevakis doesn’t believe this to be the case.

“There will always be emerging formats. Just because there is a maturation of the format, doesn’t necessarily mean the death of DVDs.”

“You need to see the sales as a whole pie,” agrees ADV Inc.’s Terry Kalagian. “You can’t track everything separately, or you won’t get an accurate picture of how the market looks.”

“Video OnDemand is limited in certain aspects,” said Mr. Heumiller. “DVD sales will become important in the promotion of TV channels, not necessarily in competing with them.”

The increase in technology in the media has given rise to a high demand for High Definition programming. However, very little anime can be found in this format.

“We absolutely love HD,” said Mr. Heumiller. “A lot of our Video OnDemand is already in HD. It’s a huge part of the draw.”

“Physical sales of HD programming are still in question,” said Mr. Sevakis. “But on TV, it’s definitely huge. The physical HD sales, DVDs and the like are much less important, though. The technology in the home has to catch up first, and then we can return our focus to actual sale of HD products. We definitely want that to happen soon, though. Physical HD formats like DVD can deliver a much better quality than TV or streamline media.”

With the constantly shifting media market, the question was then posed as to the steps needed to expand the market for anime.

“You have to buy a really good crystal ball,” said Mr. Oliver. “The market is changing so fast that you have to follow the trends of fans as well as format trends, otherwise you’ll never be able to keep up.”

Leo Chu of MTV and Spike TV had a different perspective. “The focus should be on the content. Co-production of series and movies is the next big thing. Right now the biggest market is in action animation. You need to keep your output constantly shifting to make for global accessibility. The best way to describe it is like the growing pains of globalizing actual content. It’s going to hurt at first, but eventually you’ll grow into it and adapt.”

“Storytelling, as opposed to visuals, is a big thing right now,” said Ms. Kalagian. “This is creating a jump to live action formats, instead of just focusing on animation.”

“Storytelling style is a definitely key,” agrees Mr. Oliver. “The focus on storytelling is creeping more and more into the mainstream. American shows like Lost are bringing the story into the forefront. It’s not just exclusive to anime anymore that you can have a series that tells a single story and then ends.”

“They style and technique of Japanese animation is still unique,” said Mr. Sevakis. “I’ve seen a lot of the animation that comes out of Korea and China, and while the technicality and visualizations can be great, it still doesn’t have the same soul. Shows these days need to have that human voice and emotion.”

The mention of co-production is a big point in animation today. Collaborations between Japanese and American companies to create films and television shows has increased over the past few years. Could shows like Afro Samurai, which was conceptualized in American and produced in Japan, become the new future of the industry?

“It’s not an easy thing,” said Ms. Kalagian. “In fact it’s pretty hard. The process of creating a show is completely different in Japan and the U.S. The way we see it, the only way to expand is to expand the content. The concept isn’t lost, however. You’re not only seeing an increase in the activity of U.S. companies in Japanese markets, but the Japanese are also coming to America. Recently, the movie Good Night and Good Luck was co-produced by Tohokushinsha Film Corp.”

“Sometimes co-production is the only way to get the series created,” said Mr. Oliver. “With the rise of technology, so too do the costs of production rise. There has also been a drop in sales, with the increase in television and Internet viewership.”

As per usual, nearing the end of the panel, the topic turns to the ever-present issue of piracy. Is there any way to stop this phenomenon? The general consensus was that the best way to stop it is to focus more on the consumer when releasing a series. It’s a lot easier to make it so that people don’t want nor have to pirate a series to put it on the market.

This means killing the lag time between when a series is licensed and when it goes onto the American market. One of the largest advocates for piracy is that there is a vast stagnation period between when a series comes out in Japan and when it comes out in America. Consumers tend to want their shows right here and right now.

Eric Calderon of Gonzo Entertainment pointed out that creating a bonus to becoming a consumer, rather than a pirate is also key. Special editions, collector’s editions and toys would help promote actually purchasing goods.

The general shift from the concept of aggressively pursuing fansubbers and pirates to the attempt to coax viewership away from actually participating in the illegal acquisition of series is a large step for the industry. As was pointed out several times in the panel, the future of any industry, especially that of Japanese animation, is rapidly fluctuating and near impossible to predict. However, with one ear on the ground and the other listening to the winds, companies are turning their focus more toward the consumer in hopes of riding the surging tide of a still-burgeoning industry. With the need to come up with newer, fresher ideas to keep up with a constantly expanding market, the anime industry will definitely be one to watch in the coming years.